Monthly LMI Premium

In the United States, borrowers are able to pay Lenders Mortgage Insurance (LMI) (known as Private Mortgage Insurance or PMI in the US) monthly rather than paying an upfront premium or adding the cost of LMI on top of your home loan.

You not only avoid paying a large upfront cost but it also means you don’t need as large of a deposit to qualify for a home loan.

Is it available in Australia?

Paying a monthly LMI premium is only available in the US and it’s not clear as to whether this will be available in Australia any time soon.

However, there are ways to save on mortgage insurance or get waived LMI in Australia, right now.

Hi I’m looking to buy my first home in Brisbane. I’m saving for a deposit at the moment, but it’s going to take a while and the sooner the better to move. I’m looking at a property for $480,000 and borrow 95%. Is there a way to get a loan with LMI added on loan and I don’t have to save for it?

Hi Rianul,
Yes, some lenders will allow you to add the Lenders Mortgage Insurance (LMI) on loan inflating the home loan amount. For example, if you’re applying for a $456,000 home loan for a property worth $480,000, then you would have to pay a once-off LMI premium of around $16,950. You can add it to your home loan amount so the loan amount becomes $472,950. That means, in effect, you don’t have to save for the Lender’s Mortgage Insurance but you’ve to borrow more than what’s required for you. You can instead opt for a guarantor loan, and you could borrow up to 105% of the property value and avoid LMI.

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